Aggiornato A.A. 2015-2016
Overview
The course analyses corporate finance issues looking to both the investment and the financing policy. Students will be able to understand strategic and practical investment/debt issues and to implement (through excel) standard capital budgeting technique and financial debt planning policy.
At the end of the course, students will be able to:
1. Use the NPV for evaluating real and financial investments;
2. Consider portfolio construction criteria and the impact on the firm’s risk exposure;
3. Evaluate the impact of capital structure choices on the stakeholders.
4. Measure the impact of market imperfection on the firm’s value
Pre-requisites for the Course:
Students are required to have basic knowledge of mathematical finance (interest rate and present value) and balance sheet analysis (Financial Statement)
Students that do not have such skills have to study in advance the following compulsory readings:
Berk J. and De Marzo P., Corporate Finance – Global Edition, Pearson – Chapter 2-3-4-5
Learning Objectives
Knowledge and Understanding
Knowledge and understanding of the theories and practices in corporate finance using a international point of view.
Applying Knowledge and Understanding
The course is base on applied financial data analysis and will introduce students to the best practice in the corporate finance issues
Making Judgements
Identifying key variables in selecting among real and financial investment opportunties considering the implications related to the investment selection criterion used.
Communication Skills
Summarize and present financial data necessary for evaluating investment opportunities
Learning Skills
Analizing critically financial data and discuss the implication of the results achieved
Program
Lesson 1, 21-09-15 - Fundamentals of Capital Budgeting - Chapter 8, 234-246
Lesson 2, 22-09-15 - Analyzing the project - Chapter 8, 237-258
Lesson 3, 23-09-15 - Bond Evalutation - Chapter 6, 169-20404
Lesson 4, 28-09-15 - Valuing Stocks - Chapter 9, 271-293
Lesson 5, 29-09-15 - Portfolio return and risk - Chapter 11, 352-363
Lesson 6, 30-09-15 - Optimal Portfolio Choice and the Capital Asset Pricing Model - Chapter 11, 363-399
Lesson 7, 05-10-15 - Estimating the Cost of Equity and the Cost of Debt - Chapter 12, 400-414
Lesson 8, 06-10-15 - Project’s Cost of Capital - Chapter 12, 414-436
Lesson 9, 07-10-15 - Capital Structure in a Perfect Market - Chapter 14, 478-507
Lesson 10, 12-10-15 - Debt and Taxes - Chapter 15, 508-538
Lesson 11, 13-10-15 - Financial Distress, Management Incentives and Information - Chapter 16, 539-583
Lesson 12, 14-10-15 - Payout Policy and Taxes - Chapter 17, 584-601
Lesson 13, 19-10-15 - Payout Policy and Taxes- Chapter 17, pp. 584-624
Lesson 14, 20-10-15 - The Adjusted Net Present Value - Chapter 18, pp. 626-644
Lesson 15, 21-10-15 - Capital Budgeting and Valuation with Leverage - Reference Chapter 18, pp. 644-673
Teaching methods
Lessons and assignment based on Excel simulation
References
Berk J. and DeMarzo P. (2014), Corporate Finance – Global Edition, Pearson, ISBN 978-0-273-79202-4
During the course, all theoretical issues analysed during the course will be applied on real data with excel data simulation on real data
Slides and other material will be available on the course website.
Aggiornato A.A. 2015-2016
PRE-REQUISITES FOR THE COURSE:
Students are required to have basic knowledge of mathematical finance (interest rate and present value) and balance sheet analysis (Financial Statement)
Students that do not have such skills have to study in advance the following compulsory readings:
Berk J. and De Marzo P., Corporate Finance – Global Edition, Pearson – Chapter 2-3-4-5
LEARNING OBJECTIVES
The course analyses corporate finance issues looking to both the investment and the financing policy. Students will be able to understand strategic and practical investment/debt issues and to implement (through excel) standard capital budgeting technique and financial debt planning policy.
At the end of the course, students will be able to:
1. Use the NPV for evaluating real and financial investments;
2. Consider portfolio construction criteria and the impact on the firm’s risk exposure;
3. Evaluate the impact of capital structure choices on the stakeholders.
4. Measure the impact of market imperfection on the firm’s value
MAIN REFERENCES
Berk J. and DeMarzo P. (2014), Corporate Finance – Global Edition, Pearson, ISBN 978-0-273-79202-4
ANALYTICAL SYLLABUS
Detailed Time Scheduling
No. |
DAY |
TOPIC |
Reference |
Pages |
Room and Time |
01 |
21-09-15 |
Course introduction + Fundamentals of Capital Budgeting |
Chapter 8 |
234-246 |
P2 - 14.00-16.00 |
02 |
22-09-15 |
Analyzing the project |
Chapter 8 |
237-258 |
P2 - 14.00-16.00 |
03 |
23-09-15 |
Bond Evalutation |
Chapter 6 |
169-204 |
P9 - 11.00-13.00 |
04 |
28-09-15 |
Valuing Stocks |
Chapter 9 |
271-293 |
P2 - 14.00-16.00 |
05 |
29-09-15 |
Portfolio return and risk |
Chapter 11 |
352-363 |
P2 - 14.00-16.00 |
06 |
30-09-15 |
Optimal Portfolio Choice and the Capital Asset Pricing Model |
Chapter 11 |
363-399 |
P9 - 11.00-13.00 |
- |
03-10-15 |
Assignment Week 01 |
See Blackboard |
- |
- |
07 |
05-10-15 |
Estimating the Cost of Equity and the Cost of Debt |
Chapter 12 |
400-414 |
P2 - 14.00-16.00 |
08 |
06-10-15 |
Project’s Cost of Capital |
Chapter 12 |
414-436 |
P2 - 14.00-16.00 |
09 |
07-10-15 |
Capital Structure in a Perfect Market |
Chapter 14 |
478-507 |
P9 - 11.00-13.00 |
- |
10-10-15 |
Assignment Week 02 |
See Blackboard |
- |
- |
10 |
12-10-15 |
Debt and Taxes |
Chapter 15 |
508-538 |
P2 - 14.00-16.00 |
11 |
13-10-15 |
Financial Distress, Management Incentives and Information |
Chapter 16 |
539-583 |
P2 - 14.00-16.00 |
12 |
14-10-15 |
Payout Policy and Taxes |
Chapter 17 |
584-601 |
P9 - 11.00-13.00 |
- |
17-10-15 |
Assignment Week 03 |
See Blackboard |
- |
- |
13 |
19-10-15 |
Payout Policy and Taxes |
Chapter 17 |
584-624 |
P2 - 14.00-16.00 |
14 |
20-10-15 |
The Adjusted Net Present Value |
Chapter 18 |
626-644 |
P2 - 14.00-16.00 |
15 |
22-10-15 |
Capital Budgeting and Valuation with Leverage |
Chapter 18 |
644-673 |
S9 - 11.00-13.00 |
- |
24-10-15 |
Assignment Week 04 |
See Blackboard |
- |
- |